The D.C. Attorney General’s Office has reached its largest-ever settlement in a wage theft case, the office announced on Wednesday.
A national electrical contractor called Power Design will be required to pay out $2.75 million to resolve a suit accusing the Florida-based company and two of its subcontractors of stealing wages from hundreds of electrical workers and shirking D.C. taxes.
In his original 2018 lawsuit against the company, D.C. Attorney General Karl Racine alleged that Power Design, along with subcontractors JVA Services and DDK Electric, misclassified more than 500 employees as independent contractors in order to avoid paying for benefits and other labor costs. The suit claimed that the company also did not pay its workers overtime or minimum wage, and shirked unemployment insurance taxes, from 2014 to 2017.
The company had worked on at least 10 construction projects in the city, including the LINE Hotel and a number of luxury apartment buildings, according to Racine’s office. It has also been approved to participate in a local apprenticeship program through the D.C. Apprenticeship Council, which declined to remove the company from the program even after the lawsuit was filed.
“We have been concerned about Power Design’s treatment of workers for many years now,” said Elizabeth Falcon, the executive director of DC Jobs with Justice, in a statement. The coalition of labor organizers has been calling attention to Power Design’s labor practices since 2017. “D.C. has some of the best laws in the country that support and protect workers, and strong enforcement action like this show that we are serious about putting our values into practice for workers.”
Power Design will be required to pay back $897,056 in lost wages to workers who weren’t paid overtime or minimum wage, or who were denied their sick leave, per the AG’s office. It will pay $1,820,0,944 in restitution to the city, and $50,000 for apprenticeship and job training programs here. The company has to agree to follow the District’s laws on pay and sick leave, and it has to report its use of subcontractors through next year.
“We are pleased to have reached this agreement with the District of Columbia, which we believe is in the best interest of our employees, contractors, and subcontractors with whom we work,” David Redden, vice president of Power Design, told DCist in an email statement. “We believe this agreement allows us to uphold our commitment to our employees, while correcting any mistakes made by two of our former subcontractors. We value our long-term partnership with the District and remain dedicated to the employment and training of local workers.”
JVA Electric, one of Power Design’s subcontractor’s involved in the suit, has also agreed to the terms of the consent order, per the AG’s office. The second subcontractor never responded to the lawsuit and a judge entered a default judgment in February 2019.
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Natalie Delgadillo